Staying on top of employee benefits trends helps employers and HR leaders adapt to current labor challenges. The quest to attract and keep talented employees has been an ongoing challenge for employers, especially since the onset of the COVID-19 pandemic. While the labor market 2024 is expected to cool slightly, the competition for skilled workers will remain fierce.
To stay competitive, employers must stay nimble and adapt to emerging labor and market trends. Understanding this year’s key employee benefit trends is crucial for retaining and attracting top talent in an evolving job market.
At Launchways, we know how important employee benefits are to attracting and retaining top talent. Here are some of the top trends:
Managing Healthcare Costs
Healthcare costs continue to rise. This can be attributed to factors like inflation, provider shortages, and the lingering effects of the pandemic. In fact, employers expect healthcare expenses to surge by 6% to 8.5% in 2024.
This poses significant challenges in maintaining affordable benefits for employees.
Many employers are implementing a variety of cost-saving measures to mitigate these expenses. These include implementing strategies like the following:
- Altering health plan designs
- Expanding virtual health opportunities
- Offering voluntary benefits
- Optimizing pharmacy management strategies
- Promoting preventive care services
- Revisiting cost-sharing arrangements
- Using healthcare analytics to streamline workflows
Preventive Care Services
High inflation and rising medical expenses cause many employees to avoid seeking medical attention. They fail to take steps for necessary preventative care in an attempt to avoid recurring and crippling medical bills. Unfortunately, this can worsen long-term health outcomes, resulting in increased costs to both employers and employees.
Despite concerns about rising healthcare costs, employers recognize the value of preventive care in maintaining employee health and reducing long-term expenses. Educating employees about the benefits of routine care is essential for promoting overall well-being.
Employers are emphasizing preventive care services and benefits education to encourage employees to prioritize their health, maximize benefits, and reduce healthcare costs in the long run.
Increased Flexibility and Personalization
In 2023, numerous employers struggled with finding the optimal benefits plan. Today’s diverse workforce spans multiple generations and backgrounds. Hence, employers are increasingly challenged to provide benefits that cater to everyone’s needs.
In 2024, personalized and flexible benefits options are gaining traction to accommodate individual preferences.
Popular benefit customization options could include the following:
- Flexible work arrangements with convertible paid time off
- Comprehensive medical coverage with extended leave
- Diverse wellness programs
- Flexible spending accounts
- Customized retirement plans
- Domestic partner benefits
Personalized learning opportunities are also becoming more popular benefit options.
Balancing Worker Flexibility with Employer Return-to-Office Mandates
In recent years, employers have offered remote and flexible work options to attract talent in a tight labor market. Many have reversed their position by issuing mandates to bring their employees back to the office.
As organizations transition back to the office, balancing flexibility with in-person requirements is crucial. Employers risk losing talent and hindering diversity, equity, and inclusion (DEI) efforts if they fail to accommodate employees’ preferences for remote or hybrid work arrangements.
Therefore, some employers are adopting hybrid work models. This enables them to prioritize employee well-being while offering incentives such as commuter benefits, childcare assistance, and catered meals to encourage in-person attendance.
Making Employee Mental Health a Priority
Mental health issues among employees are a growing concern. Factors like stress, financial worries, and pandemic-related disruptions can exacerbate it. In turn, employee mental health issues can significantly impact productivity in a company. In fact, addressing mental health in the workplace is crucial for maintaining productivity, retention, and morale.
Savvy employers will continue prioritizing employee mental health through varied methods that could include the following:
- Anti-stigma campaigns
- Expanded assistance programs
- Manager training for recognizing employees’ behavioral issues
- Meditation resources
- Resilience and coping programs
- Focused treatment options and expanded service offerings
- Virtual therapy sessions
Build an Inclusive Work Culture
Although employers are investing more efforts in promoting diversity, equity, and inclusion, employees in marginalized groups continue to feel disconnected. That can lead to an inhibition of creativity and willingness to collaborate. It also increases the chance of worker burnout, which further leads to an increase in the rates of turnover and absenteeism. Addressing feelings of belongingness is essential for fostering a positive work environment and reducing turnover.
Many employers are focusing on building an inclusive workplace culture to bridge the gap between DEI initiatives and the reality experienced by employees. They focus on aspects such as leadership behaviors, building social bonds, and open communication. Involving employees in decision-making, creating fair compensation practices, and transparent promotion processes go a long way toward fostering a culture of belonging.
Expanded Family Building and Reproductive Health Benefits
After the 2023 US Supreme decision regarding abortion rights, reproductive health care benefits became a critical issue for many employers. Therefore, reproductive health benefits and family-building assistance have gained popularity.
Employers recognize their importance in supporting employees’ personal and family needs. These benefits enhance employee satisfaction and contribute to a more inclusive workplace culture.
Some of the expanded benefit offerings include:
- Paid parental leave
- Childcare subsidies
- Flexible scheduling
- Surrogacy benefits
- Family planning assistance
- High-risk pregnancy care
- Lactation support
- Reproductive healthcare coverage
Key Takeaway
Understanding and adapting to these employee benefits trends are vital for employers aiming to attract and retain top talent in today’s competitive labor market. Employers can create a healthier, happier, and more productive workforce by offering relevant and flexible benefits packages, ultimately contributing to organizational success. For more resources on optimizing employee benefits, contact Launchways today.